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California private sector employment legislation update - June 2013

May 31 was the deadline for most California state bills to pass their house of origin to be further considered in this year’s legislative session, so the winnowing proceeds.

Key bills, including the minimum wage increase (AB 10), passed their house of origin, and will proceed through the committee and floor review process in the other chamber.

A Senate-passed bill (SB 400) would extend current employment protections for employees who are victims of domestic violence and sexual assault to employees who are known or suspected victims of stalking, and require that an employer provide them with reasonable accommodations, which could be any of more than a dozen possible accommodations listed in the current version of the bill. The bill is scheduled to be heard June 12 in Assembly Labor and Employment. The 13-page committee report lists 17 business and employer groups as opposing the measure in its current form.

An exception to the May 31 deadline is a bill (AB 880) designated as an “urgency” measure. This bill, which was amended on May 28 to make it an urgency bill, would assess penalties against employers with 500 employees or more who choose to enroll in the MediCal program. An urgency bill requires passage by a two-thirds majority in both the Senate and the Assembly – and the Democrats have such majorities in each house. Although resisted strongly by the business community, the bill seems an even-money bet to pass in some form, urgency or otherwise.

For employers with unionized employees, another bill of interest would create a new evidentiary privilege, making confidential most communications between a union agent and union member (AB 729). This bill passed the Assembly and is pending in the Senate Judiciary.

The Legislature will take its summer recess beginning July 4 through August 4. The last day for any bill to be passed is September 13. The Governor must sign or veto by October 13 any bill passed by the Legislature on or before September 13 and in the Governor’s possession after September 13.

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The following is a brief summary of significant bills affecting California private employers¹ now pending in the Legislature and their status in the legislative process.

AB 10 would raise the minimum wage, in steps, to $9.25 per hour by 2016, and provide that the minimum wage could increase, but not decrease, as adjusted by the California Consumer Price Index. Passed Assembly; to Senate pending referral.

AB 155 (last amended May 29) would require an employee to elect to inspect or copy, or receive a copy of, or any combination thereof, his or her employment records. The employer would be required to comply with such elections, but may charge employees the actual cost of reproduction. The bill would entitle a former employee terminated for workplace violence or harassment only to receive a copy of the records without any charge imposed by the employer. The bill would define “actual cost of reproduction” to mean only the per page cost to the employer for the physical duplication of the records. Passed Assembly; to Senate pending referral.

AB 263 (last amended May 24) would, among other things, add a new portion to the Labor Code prohibiting specified "unfair immigration-related practices," increase civil penalties to as high as $10,000 per employee per violation for any retaliation against an employee, and would require a court to order the appropriate government agencies to suspend or revoke an offending employer’s business license. Passed Assembly; to Senate pending referral.

AB 442 would expand the civil penalty and the payment of restitution of wages to the employee for a Labor Commissioner citation against an employer by also subjecting the employer to payment of liquidated damages to the employee. Passed Assembly; pending in Senate Labor and Industrial Relations.

AB 729 would create an evidentiary privilege shielding communications between a union agent and a represented worker. Passed Assembly; pending in Senate Judiciary.

AB 880 (last amended May 28) would require a large employer (500 or more employees) to pay the Employment Development Department an “employer responsibility penalty” for each covered employee enrolled in Medi-Cal based on the average cost of coverage provided by large employers to their employees, including both the employer’s and employee’s share of the premiums; would assess interest of 10% per annum on employer responsibility penalties not paid on or before the date payment is due; would require a large employer subject to an employer responsibility penalty to pay a penalty for any such payment that is more than 60 days overdue. This bill would also make it unlawful for a large employer to, among other things, designate an employee as an independent contractor or temporary employee, reduce an employee’s hours or work, or terminate an employee if the purpose is to avoid the imposition of the penalty; a violation of those provisions would result in a penalty of 200% of the penalty amount the employer would have paid for the applicable period of time. The bill would also prohibit a large employer from discharging or taking other action against an employee who enrolls in a public health benefit program or obtains advanced premium tax credits through the California Health Benefit Exchange and would make the willful refusal of the employer to rehire, promote, or otherwise restore the employee or former employee a misdemeanor. The bill would authorize an employee to file a complaint with the Division of Labor Standards Enforcement of the Department of Industrial Relations if the employee is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated or retaliated against in the terms and conditions of employment by his or her employer because the employee exercised his or her rights under these provisions. By establishing a new crime, this bill would impose a state-mandated local program. This measure is designated as an urgency bill (requiring two-thirds vote to pass each house; would take effect on signing by the Governor). Pending Assembly passage (exempt from May 31 passage-by-house-of-origin deadline).

AB 1082 would require an employer who employs 50 or more full-time equivalent employees to annually report to the Employment Development Department specified information relating to the average number of hours each employee worked per week in a calendar year and whether those employees were enrolled in minimum essential coverage under an eligible employer-sponsored health care plan. Pending in Assembly Appropriations.

AB 1385 would require the Department of Industrial Relations to procure a case management system that has the capability to provide the public with free, web-based access to a searchable database containing information regarding the final disposition of all complaints, citations, and administrative proceedings of the department. Pending in Assembly Labor and Employment.

AB 1387 would increase the car wash employer’s bond requirement amount from $15,000 to $150,000, but would exempt an employer from that requirement if the employer has a collective bargaining agreement in place that meets specified criteria and would delete the existing sunset date for the statute governing car washes, thus extending those provisions indefinitely. Passed Assembly; to Senate pending referral.

SB 168 would make a successor farm labor contractor liable for wages and penalties owed by a predecessor farm labor contractor. Passed Senate; pending in Assembly Labor and Employment.

SB 292 would clarify that no evidence of sexual desire is required for proof of a claim of sexual harassment; intent of bill is to negate what the bill’s author suggests is the outlier holding in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191, which held that a plaintiff in a same-sex harassment case must prove that the harasser harbored a sexual desire for the plaintiff in order to survive summary judgment. Passed Senate; pending in Assembly Labor and Employment.

SB 390 creates a criminal provision in the Labor Code allowing the Labor Commissioner to pursue a criminal misdemeanor prosecution against employers that do not remit payroll taxes. Passed Senate; pending in Assembly Labor and Employment.

SB 400 would extend the protections available to persons in FEHA-protected categories to victims of stalking; would also prohibit an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s known status as a victim of domestic violence, sexual assault, or stalking; would require the employer to provide reasonable accommodations for such a victim; would create a private right of action for an aggrieved employee to seek enforcement of these victim status protection and reasonable accommodation provisions; would permit the recovery of reasonable attorney’s fees by a prevailing employee only. Passed Senate; pending in Assembly Labor and Employment.

SB 404 would add "familial status" as a protective status under the Fair Employment and Housing Act The concept of “familial status” is very broadly defined in the bill. Passed Senate; pending referral in the Assembly.

SB 435 would require employers of piece rate workers to pay those employees for any rest breaks mandated by law and set the rate of pay for rest and recovery periods for piece rate workers. Passed Senate; pending in Assembly Labor and Employment.

SB 462 would authorize the award of attorney's fees and costs in an action brought for the non-payment of wages, fringe benefits or health and welfare pension fund contributions, where the prevailing party is not the employee, contingent on a finding by the court that the employee brought the court action in bad faith. Passed Senate; pending referral in the Assembly.

SB 556 would expand employers’ liability for damages caused by an independent contractor or the independent contractor's employees, including wage and hour violations, penalties, fines and willful misconduct if the contractor or its employees were uniformed similar to that of the contracting entity or drove a vehicle with the contracting entity’s logo. Passed Senate; pending referral in the Assembly.

SB 607 (“Workplace Flexibility Act”) would have allowed individual employees to propose alterative work schedules to employers, such as 10 hours a day for four workdays a workweek, with the ninth and tenth hours being paid at the regular rate of pay, and overtime for any hours beyond 10 hours in a day or 40 in a workweek. Failed passage on 3-1 vote in Senate Labor and Industrial Relations; reconsideration granted.

SB 648 would extend the same prohibitions on the smoking of tobacco products to electronic cigarettes. Passed Senate; pending referral in the Assembly.

SB 776 would modify existing law concerning permissible credits employers may take against the obligation to pay the general prevailing rate of per diem wages for prevailing wage payments, and would prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement. Passed Senate; pending in Assembly Labor and Employment.

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